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Is Your Bank Healthy? Use Our New Bank Health Ratings Page

Over the past few months, we've made an enhancement to our Bank Health Ratings page. In addition to making it easy to evaluate the financial health of your bank or credit union, the new Bank Health Ratings page provides an overview of the financial health topic. The page shows how the financial health of banks has improved since the financial crisis, and it offers insights about the chance of a financially unhealthy bank failing. In addition, it describes the consequences that an unhealthy or failing bank can have on you.

You can access the Bank Health Ratings page from any page at Just select the "Banks" drop-down menu in the top navigation bar, and select the "Bank Health Ratings" link. Below is a snapshot of a piece of the home page showing how to select the "Bank Health Ratings" page.

Interactive Slideshow

The first change you’ll notice in the Bank Health Ratings page is a multimedia slideshow which provides an overview of the financial health of the banking industry. The slideshow graphs show how the number of financially unhealthy banks have changed in the last eight years and how this correlates with the number of bank failures.

The banking industry is dominated by four "too big to fail" banks, and a failure at any one of these banks would impact the entire economy. As can be seen in the fourth slide, the "too big to fail" banks have grown larger since the financial crisis of 2008. However, their overall financial health has improved.

The last slide in the slideshow is an interactive map of the U.S. that ranks the states based on the financial health of the banks. The states with lighter green are the healthiest states, and those with lighter red are the riskiest states. To see the list of the healthiest and riskiest banks for each state, just click on the state in the map with the left mouse button. A pop-up box will display the health ranking of the state and include two links that point to the lists of the healthiest and riskiest banks in that state.

bank health by state

Learning About the Health of Your Bank

The lists of the healthiest and riskiest banks are actually an interactive table that allows you to filter the results based on institution type (bank or credit union), the state, and asset size. The banks and credit unions are ranked based on the Texas Ratio, which is a standard measure of a bank's credit troubles. Higher Texas Ratios indicate more severe credit troubles.

The Texas Ratio is one component of the proprietary formula used by to assess the financial health of a bank or credit union. The components are combined into a letter grade in which an A+ indicates the best score and an F indicates the worst score. You can read more details about the Texas Ratio and the other components of the formula in the Bank Health Ratings page in the section right above the Texas Ratio table.

To find the Texas Ratio and the health grade of any federally insured bank or credit union, use the search box located just above the Texas Ratio table. When you find your bank or credit union, you’ll be taken to our hub page for that institution. One of the sections of this hub page covers the financial health. Each quarter we update the health grades based on new financial information released by the FDIC and NCUA.

bank health search box

Why the Health of Your Bank is Important

Finally, why should you care about the financial health of your bank or credit union? It might not seem important if your deposits always stay under the standard insured limits. However, there are several reasons to be concerned about the financial health of your bank or credit union. These reasons are listed in the Bank Health Ratings page right under the slideshow. One of the most interesting reasons is that it could affect your deposit rates. If the FDIC categorizes the bank less than well capitalized, the bank may be forced to keep its rates under FDIC rate caps. This has caused several banks to make substantial rate cuts to their reward checking accounts.

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  |     |   Comment #1
To me, the health of the bank or CU is irrelevant as long as I stay under the FDIC insurance limits, which is almost 100% of the time as I can remember.
The bank deals are more important than their health.
  |     |   Comment #2
You an lose the benefit of a long-term CD rate, current interest rate, etc. even if the FDIC insurance is available
  |     |   Comment #5
Most of the interest rates across the board are about the same and are usually approved by the FDIC before issuing.
If the bank has high rating, you already lost the extra interest than if you went for a lesser bank by rating and they went under (highly unlikely event).
In other words, the rating is not useful at all, you always lose money going for high strength in a bank, they pay less.
  |     |   Comment #6
True, but when/if the "highly unlikely" occurs then everything goes south!  A risk to some may not be to others
  |     |   Comment #3
The best gets better! Another outstanding, useful
tool of DA. Thank you Ken and partner(s).
  |     |   Comment #4
Thank you for the valuable information.  I noticed that Puerto Rico is not on the map or available as a drop-down option on the list of "States" but several banks with headquarters in PR appear on the list of worst banks with assets over $1B.
  |     |   Comment #7
Ken, I'm confused which admittedly doesn't take much.  How does my bank make both the healthy & riskiest list?
Ken Tumin
  |     |   Comment #8
What bank is that?
  |     |   Comment #9
Savings Bank of Danbury in CT.  I love this bank & would hate to see it close.  I use it for myself & my parents.  They were very helpful when I had to start managing my parents money.
Ken Tumin
  |     |   Comment #10
I figured out why this bank appears in both lists. Connecticut only has 9 banks with assets of $1+ billion. If you search for our health page for Union Savings Bank, you'll see we give it a grade of a B which is pretty safe.
  |     |   Comment #11
So if you had a bank that was your hub central bank for all your checking, direct deposit
(social security / pension), and electronic draft withdrawals for monthly bills and was rated in the risky range, what would be the maximum Texas ratio number that would trigger a person to make the time consuming changes necessary to move to a more healthy rated bank?
  |     |   Comment #12
While ratio numbers are nice but they are not current!  What are the real time indicators of "something going on" is what I usually look for AND then look to ratios.  For example, recent CFO changes are a big trigger to me.  Footnotes to financials, etc.

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